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While the House vote on Trump impeachment is driving headlines today, a Senate vote is still extremely unlikely to pass. More meaningful news comes out of the United Kingdom, and it's drawing our attention to the top dividend stocks this week.
And our best dividend stock might soon raise its dividend...
The Bank of England held interest rates in place during its recent policy meeting. Facing the departure of the U.K. from the European Union, the BoE released a weak economic outlook for the nation's economy. Its decision to keep interest rates steady falls in line with the number of other central banks that will maintain lower interest rates to bolster economic growth.
Lower interest rates put pressure on retirees living on fixed incomes. The 10-year bond currently hovers under 2%, meaning that anyone trusting U.S. bonds for safety must seek other alternatives to boost their income.
Today, we're looking at a handful of the top dividend stocks to own this week. Some recently hiked their dividends, while others are trading at discounts and represent terrific long-term value for anyone seeking appreciation upside and a rock-solid yield.
Dividend Stock to Buy, No. 3: Apollo Global Management
Apollo Global Management Inc. (NASDAQ: APO) is a diversified private equity firm that has thrived over the last year. Shares are up more than 100% from their 52-week lows right now.
And 2020 looks like another big year in the works as this company capitalizes on the incredible shift by investors from traditional markets to alternative investments. The stock pays a solid 4.32% yield, a level that appears secure in almost any investment environment.
Should the economy turn south, Apollo is well positioned to excel as a leader in distressed securities, corporate restructuring, and other special situations. With interest rates low and economic growth strong, it would see a boost from its leveraged buyout group, M&A team, and other strategic investments.
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Just this week, one of the companies that it owns generated a huge victory for the private equity firm when it reached a strategic agreement with Amazon.com Inc. (NASDAQ: AMZN). Apollo's discount airliner Sun Country announced it would haul Amazon packages during non-peak airline periods. Sun Country will begin its shipping program in Q2 and boost its roster of pilots.
But this next dividend stock has an even higher dividend yield.
Dividend Stock to Buy, No. 2: AT&T
When it comes to cash flow, look no further than the booming telecommunications industry. And the company with the biggest foothold in the space is AT&T Corp. (NYSE: T). Last week, AT&T's board of directors approved an increase in its quarterly dividend by 2% to $0.52 per share. That brings the annual cash payment for AT&T stock to $2.08 - or a 5.4% yield at the time.
That's a rock-solid dividend for a company that could easily outperform the markets in 2020. Also, the firm announced it has started buying back shares. It could repurchase up to 100 million shares in the first quarter of the year. To accelerate the process, the firm entered a $4 billion repurchase agreement.
Keep in mind that AT&T could generate significant value in the year ahead. It is currently engaged with hedge fund Elliott Management to explore strategic ways to boost cash flow and increase value for shareholders. This includes a program to reduce costs and increase cash flow.
The firm also stands to benefit from a merger between the third and fourth largest mobile providers in Sprint Corp. (NYSE: S) and T-Mobile US Inc. (NYSE: TMUS) in the year ahead. Such a deal would reduce AT&T's need to run promotions to bolster its subscriber base.
Our best dividend stock today is poised to bolster its dividend very soon...
Dividend Stock to Buy, No. 1
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Banking stocks look increasingly attractive in today's market environment. With economic growth looking resilient heading into 2020, banks are looking for ways to attract new investors. One of the best ways to do so is with an aggressive shareholder plan to hike dividends, buy back stock, and increase cash flow.
This year, Bank of America Corp. (NYSE: BAC) successfully received clearance from the U.S. Federal Reserve to pay out $37 billion in buybacks and dividends. The clearance came after the Fed required 18 of the largest financial institutions to produce its Comprehensive Capital Analysis and Review (CCAR) to comply with the Dodd-Frank Act.
Bank of America had the top plan to return cash to investors. But there is speculation that the bank - which has raised its dividend six years in a row - will bolster its dividend yet again in the year ahead. That could easily push the stock price even higher soon. From a historical perspective, the BOA dividend is the lowest it's been since the 1990s, so it will look to return more capital and establish trust with investors again in 2020.
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About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.